(As filed on June 26, 2001)
File No. 70-9877
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
ON
FORM U-1/A
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
AMEREN CORPORATION
1901 Chouteau Avenue
St. Louis, Missouri 63103
(Name of company filing this statement and address of
principal executive offices)
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AMEREN CORPORATION
(Name of top registered holding company parent of each applicant or declarant)
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Steven R. Sullivan, Vice President,
General Counsel and Secretary
Ameren Services Company
1901 Chouteau Avenue
St. Louis, Missouri 63103
(Name and address of agent for service)
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The Commission is requested to mail copies of all orders, notices and other
communications to:
Ronald K. Evans, Esq. William T. Baker, Jr., Esq.
Ameren Services Company Thelen Reid & Priest LLP
1901 Chouteau Avenue 40 West 57th Street
St. Louis, Missouri 63103 New York, New York 10019
The Application/Declaration filed in this proceeding on April 4, 2001, is
hereby amended and restated in its entirety to read as follows:
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
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1.1 Introduction. Ameren Corporation ("Ameren"), whose principal business
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address is at 1901 Chouteau Avenue, St. Louis, Missouri 63103, is a registered
holding company under the Public Utility Holding Company Act of 1935, as amended
(the "Act"). Ameren owns all of the issued and outstanding common stock of Union
Electric Company d/b/a AmerenUE ("AmerenUE") and Central Illinois Public Service
Company d/b/a AmerenCIPS ("AmerenCIPS"), each of which is an electric and gas
utility company. Together, AmerenUE and AmerenCIPS provide retail and wholesale
electric service to approximately 1.5 million customers and retail natural gas
service to approximately 300,000 customers in a 24,500 square-mile area of
Missouri and Illinois. For the year ended December 31, 2000, Ameren reported
total operating revenues of $3,855,849,000, of which approximately 91.4% were
derived from electric operations and 8.4% from gas operations.
In addition to its two public-utility subsidiaries, Ameren directly owns
all of the issued and outstanding common stock of five non-utility subsidiary
companies, as follows:
(1) Ameren Services Company, a subsidiary service company.
(2) Ameren Energy, Inc., an "energy-related company" within the meaning of
Rule 58 that engages in short-term wholesale purchases and sales of electricity
as agent for AmerenUE and Ameren Energy Generating Company ("Genco").
(3) Ameren Development Company ("Ameren Development"), an intermediate
non-utility holding company that was formed to acquire and hold the securities
of other exempt and authorized non-utility companies. Ameren Development's
direct and indirect subsidiaries include Ameren Energy Communications, Inc., an
"exempt telecommunications company" ("ETC") within the meaning of Section 34 of
the Act, and Ameren ERC, Inc., an "energy-related company" within the meaning of
Rule 58 that engages in various activities permitted under such rule (chiefly,
steam production and sales and fuel transportation).
(4) Ameren Energy Resources Company ("Resources"), also an intermediate
non-utility holding company, which holds the securities of other exempt and
authorized non-utility companies. Resources owns all of the issued and
outstanding common stock of Ameren Energy Development Company ("AEDC"), an
"exempt wholesale generator" ("EWG") within the meaning of Section 32 of the
Act 1 that engages primarily in development and construction activities
relating to EWGs and holds all of the issued and outstanding common stock of
Genco, which is also an EWG.2 Genco was formed to acquire all of the generating
assets of AmerenCIPS (2,860 MW), which occurred in May 2000, and, in addition,
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1 See Ameren Energy Development Company, 92 FERC P. 62,238 (June 29, 2000).
2 See Ameren Energy Generating Company, 92 FERC P. 62,023 (July 14, 2000).
2
is the vehicle through which Ameren expects to own and operate up to an
additional 2,894 MW of new gas-fired generation in the Midwest. Resources also
holds all of the common stock of Ameren Energy Fuels and Services Company and
Ameren Energy Marketing Company, which engage in businesses permitted by Rule
58, and Illinois Materials Supply Co., which manages materials acquisition for
certain of Ameren's EWG projects in Illinois.
(5) CIPSCO Investment Company, which manages various non-utility
investments.
The aforementioned direct and indirect non-utility subsidiaries of Ameren,
and any other current or future non-exempt, non-utility subsidiaries of Ameren
are hereafter referred to collectively as the "Non-utility Subsidiaries." An
organizational chart of the Ameren system is filed herewith as Exhibit E.
Under its Restated Articles of Incorporation, as amended (Exhibit A-1
hereto), Ameren is authorized to issue 500,000,000 shares of capital stock
consisting of 400,000,000 shares of common stock, $.01 par value ("Common
Stock"), and 100,000,000 shares of preferred stock, $.01 par value ("Preferred
Stock"), which may be issued in one or more series with such designations as are
approved by Ameren's board of directors. As of December 31, 2000, Ameren had
issued and outstanding 137,215,462 shares of Common Stock; Ameren does not have
any outstanding Preferred Stock.
As of December 31, 2000, Ameren's capitalization on a consolidated basis
was as follows: common stock equity - 49.8%; preferred stock equity - 3.6%;
long-term debt (excluding current maturities) - 42.7%; and short-term debt
(including current maturities of long-term debt) - 3.9%.
1.2 Ameren's Current Financing Authorization.
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1.2.1 File No. 70-9133. By order dated March 13, 1998 in File No.
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70-9133,3 as amended by order dated April 26, 1999 4 (as so amended, the
"Current Financing Order"), Ameren is authorized to issue and sell from time to
time through February 27, 2003 (i) up to 25 million shares of Common Stock for
general corporate purposes other than for use under Ameren's dividend
reinvestment and employee benefit plans, (ii) commercial paper and/or other
short-term debt ("Short-term Debt") in an aggregate principal amount at any one
time outstanding not to exceed $1.5 billion, and (iii) unsecured notes having
maturities of more than one year and up to 40 years ("Debentures") in an
aggregate principal amount at any time outstanding not to exceed $300 million,
subject to an overall limitation of $1.5 billion on the aggregate principal
amount of Short-term Debt and Debentures at any one time outstanding. In
addition, Ameren is authorized to provide guarantees and other forms of credit
support ("Guarantees") on behalf of its Non-utility Subsidiaries in an aggregate
amount at any one time outstanding not to exceed $1 billion. Ameren has not
issued and sold any shares of Common Stock or Debentures pursuant to the
authority granted under the Current Financing Order. At December 31, 2000,
------------------------
3 See Ameren Corporation, et al., Holding Co. Act Release No. 26841 (Mar.
13, 1998).
4 See Ameren Corporation, et al., Holding Co. Act Release No. 27011 (Apr.
26, 1999).
3
Ameren had $167 million aggregate principal amount of Short-term Debt
outstanding, and had outstanding Guarantees aggregating approximately $77
million.
1.2.2 File No. 70-8945. In addition, under the terms of the
----------------
Commission's order approving Ameren's acquisition of AmerenUE and AmerenCIPS
(the "Merger Order"),5 Ameren is authorized to issue and/or acquire in open
market transactions for the purpose of issuance, from time to time through
December 30, 2002, an additional 15 million shares of its Common Stock under its
dividend reinvestment plan and certain employee benefit plans, as described in
Item 1.5.1 below. Any shares of Common Stock used to fund these plans may be, at
the discretion of Ameren, authorized but unissued shares, treasury shares or
shares purchased by Ameren on the open market by an independent plan
administrator or agent. Through December 31, 2000, Ameren had purchased a total
of 6,426,091 shares of Common Stock for delivery under these plans.
1.2.3 File No. 70-9177. By order dated April 24, 1998 in File No.
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70-9177 ("Incentive Plan Order"),6 Ameren is authorized , through March 31,
2003, to issue and/or acquire in the open market up to 4 million shares of its
Common Stock for purposes of making awards under its long-term incentive plan,
as described in Item 1.5.1 below. This is in addition to shares of Common Stock
that may be issued or purchased under the Current Financing Order and Merger
Order. Any shares of Common Stock used to fund this plan may be, at the
discretion of Ameren, authorized but unissued shares, treasury shares or shares
purchased by Ameren on the open market by an independent plan administrator or
agent. Through March 31, 2001, Ameren had issued a total of 2,425,800 Common
Stock units represented by options and 141,788 restricted shares of Common Stock
under the long-term incentive plan.
1.2.4 File No. 70-9427. By order dated July 23, 1999 in File No.
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70-9427 ("Restructuring Order"),7 Ameren is authorized, through December 31,
2003, to, among other things, organize and acquire the equity securities of one
or more new subsidiaries ("Financing Subsidiaries") to facilitate the issuance
and sale of long-term debt or equity securities to investors other than Ameren
in order to finance Ameren's direct or indirect investments in Non-utility
Subsidiaries. Under the Restructuring Order, the Commission reserved
jurisdiction over the transfer of any financing proceeds of a Financing
Subsidiary to Ameren pending completion of the record.
1.3 Summary of Requested Approvals. Ameren proposes herein to amend and
------------------------------
restate its current financing authorization, as contained in the Current
Financing Order, Merger Order, and Incentive Plan Order in order to, among other
things, extend the authorization period for such financings, increase the
authorized limits, and expand the types of securities that Ameren may issue
directly or indirectly through a Financing Subsidiary. Upon the effective date
of the Commission's order in this proceeding, Ameren will relinquish its
authority to issue securities (including Guarantees) under the Current Financing
------------------------
5 See Ameren Corporation, Holding Co. Act Release No. 26809 (Dec. 30,
1997).
6 See Ameren Corporation, et al., Holding Co. Act Release No. 26862 (Apr.
24, 1998).
7 See Ameren Corporation, et al., Holding Co. Act Release No. 27053 (July
23, 1999).
4
Order, the Merger Order, and the Incentive Plan Order.8 In addition, Ameren is
requesting that the Commission release jurisdiction reserved under the
Restructuring Order over the transfer of proceeds of a Financing Subsidiary to
Ameren.
Specifically, Ameren requests approval for a program of external financing
and credit support arrangements for the period through September 30, 2004
("Authorization Period"), as follows:
(i) Ameren requests authority to issue and sell from time to time,
directly or indirectly through one or more direct Financing
Subsidiaries, equity securities and long-term debt securities in an
aggregate amount at any time outstanding not to exceed $2.5 billion.
Within such overall financing limitation, Ameren proposes to issue and
sell Common Stock and Preferred Stock 9 and, directly or through one
or more direct Financing Subsidiaries, unsecured long-term
indebtedness ("Long-term Debt") and other forms of preferred or
equity-linked securities having maturities of up to 50 years.
(ii) Ameren requests authority to issue up to 25 million shares of Common
Stock pursuant to its dividend reinvestment plan and employee savings
and incentive compensation plans maintained for its officers and
employees, or other similar stock-based plans adopted in the future,
such shares to be in addition to any shares of Common Stock issued
under the authority requested in (i), above.
(iii) Ameren requests authority to issue and sell from time to time,
directly or indirectly through one or more Financing Subsidiaries,
Short-term Debt in an aggregate principal amount at any time
outstanding not to exceed $1.5 billion.
(iv) Ameren requests authority to provide Guarantees on behalf or for the
benefit of its Non-utility Subsidiaries in an aggregate principal or
nominal amount not to exceed $1.5 billion at any one time outstanding,
provided that any securities issued by Financing Subsidiaries of
Ameren that are guaranteed or supported by other forms of credit
enhancement provided by Ameren will not count against this limitation.
(v) Ameren, directly or indirectly through any Financing Subsidiary,
requests authority to enter into hedging transactions ("Interest Rate
Hedges") with respect to existing indebtedness in order to manage and
minimize interest rate costs, and to enter into hedging transactions
------------------------
8 The authority of AmerenUE and AmerenCIPS under the Current Financing
Order to issue securities and enter into interest rate hedges will continue
unaffected by the order in this proceeding.
9 Any shares of Preferred Stock issued under the authorization in this
proceeding would be in addition to any Preferred Stock that may be issued under
Ameren's stock purchase rights plan, as authorized by the Commission. See Ameren
Corporation, Holding Co. Act Release No. 26961 (Dec. 29, 1998).
5
("Anticipatory Hedges") with respect to anticipatory debt issuances in
order to lock-in current interest rates and/or manage interest rate
risk exposure.
Ameren represents that at no time during the Authorization Period will any
securities be issued hereunder if after the issuance thereof common equity as a
percentage of Ameren's consolidated capitalization (including Short-term Debt)
would be below 30%. Further, Ameren represents that it will maintain common
equity as a percentage of capitalization of AmerenUE and AmerenCIPS at 30% or
above during the Authorization Period.
In addition to the foregoing financing proposals, Ameren is requesting that
the Commission release jurisdiction heretofore reserved under the Restructuring
Order over the transfer of any financing proceeds of a Financing Subsidiary to
Ameren.
1.4 Use of Proceeds. Ameren will utilize the proceeds of financing
---------------
authorized hereunder for general and corporate purposes including: (a)
financing, in part, of the capital expenditures of Ameren and its subsidiaries;
(b) financing working capital requirements and capital spending of the Ameren
system; (c) financing exempt acquisitions of interests in EWGs and "foreign
utility companies" ("FUCOs"), subject to the limitations of Rule 53; (d)
financing exempt acquisitions of interests in "energy-related companies," as
defined in Rule 58, subject to the limitations of that rule; (e) the
acquisition, retirement, refinancing or redemption of securities of which Ameren
is the issuer pursuant to Rule 42; and/or (f) the acquisition of the securities
of other types of non-utility companies as authorized by the Commission in a
separate proceeding.
Among other uses of financing proceeds, Ameren contemplates making further
investments in AEDC to fund the development and construction of additional
unregulated generating capacity and investments in Genco to fund the acquisition
of completed and operating units from its affiliates and from third parties. In
this connection, Ameren has committed to purchase for its unregulated business
combustion turbine generator units, which will add approximately 2000 MW to its
net peaking capacity through 2005, for a total cost of approximately $1 billion.
In addition, Ameren seeks to have the flexibility to finance investments in
other unregulated generation assets and in other energy-related businesses as
and when opportunities arise without the need to seek further financing
approvals.
1.5 Description of Specific Financing Proposals. Ameren contemplates that
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Common Stock, Preferred Stock, Long-term Debt and other preferred or
equity-linked securities (including units with incorporated options, warrants
and/or forward equity purchase contracts or provisions) that are exercisable or
exchangeable for or convertible into Common Stock would be issued directly to
one or more purchasers in privately-negotiated transactions or to one or more
investment banking or underwriting firms or other entities who would resell such
securities without registration under the Securities Act of 1933 in reliance
upon one or more applicable exemptions from registration thereunder, or to the
public either (i) through underwriters selected by negotiation or competitive
bidding or (ii) through selling agents acting either as agent or as principal
for resale to the public either directly or through dealers. All such securities
sales will be at rates or prices and under conditions negotiated or based upon,
or otherwise determined by, competitive capital markets.
6
1.5.1 Common Stock. Ameren may issue and sell Common Stock through
------------
underwriters or dealers, through agents, or directly to a limited number of
purchasers or a single purchaser. If underwriters are used in the sale of Common
Stock, such securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Common Stock may be offered to
the public either through underwriting syndicates (which may be represented by a
managing underwriter or underwriters designated by Ameren) or directly by one or
more underwriters acting alone. Common Stock may be sold directly by Ameren or
through agents designated by Ameren from time to time. If dealers are utilized
in the sale of Common Stock, Ameren will sell such securities to the dealers, as
principals. Any dealer may then resell such Common Stock to the public at
varying prices to be determined by such dealer at the time of resale. If Common
Stock is being sold in an underwritten offering, Ameren may grant the
underwriters thereof a "green shoe" option permitting the purchase from Ameren
at the same price of additional shares solely for the purpose of covering
over-allotments.
Ameren may also issue Common Stock or options, warrants or other stock
purchase rights exercisable for Common Stock in public or privately-negotiated
transactions as consideration for the equity securities or assets of other
companies, provided that the acquisition of any such equity securities or assets
has been authorized in a separate proceeding or is exempt under the Act or the
rules thereunder (specifically Rule 58).10
Ameren also proposes to issue Common Stock and/or purchase shares of its
Common Stock (either currently or under forward contracts) in the open market
for purposes of reissuing such shares at a later date under stock-based plans
that it or any of its subsidiaries maintain for shareholders, investors,
employees and nonemployee directors (collectively, "Plans"). Currently, Ameren
maintains the following stock-based Plans for its shareholders and employees:
o Dividend Reinvestment Plan. Ameren's dividend reinvestment and stock
--------------------------
purchase plan ("DRPlus") is intended to provide participants with a
convenient way to purchase Common Stock and to reinvest all or a
portion of the dividends received on Common Stock or on preferred
stock of AmerenUE or AmerenCIPS in additional shares of Common Stock.
In addition, participants in the DRPlus may make optional cash
purchases of Common Stock in a minimum amount of $25 per transaction
after the initial investment and up to a maximum of $120,000 per year.
Eligible non-shareholders may enroll in the DRPlus by making an
initial minimum cash investment of $250. Eligible non-shareholders who
are employees of Ameren or its subsidiaries may authorize a minimum
payroll deduction investment of $25 per pay period to purchase Common
Stock. If shares of Common Stock for issuance under the DRPlus are
purchased on the open market or in privately negotiated transactions,
------------------------
10 The Commission has previously approved the issuance of common stock as
consideration for the acquisition of a new business in an exempt transaction or
transaction that has been approved in a separate proceeding. See e.g., SCANA
Corp., Holding Co. Act Release No. 27137 (Feb. 14, 2000).
7
the price of such shares shall be the weighted average price at which
an independent agent acquired such shares on the applicable investment
date plus applicable brokerage commissions and other fees. If Ameren
chooses to issue new shares of Common Stock, the price on the
applicable investment date will be the average of the high and low
sales prices for Ameren's Common Stock reported as New York Stock
Exchange Composite Transactions. Ameren has registered 6,500,000
shares of Common Stock for issuance under the DRPlus. A full
description of the DRPlus is included in Post-Effective Amendment No.
1 to Ameren's Registration Statement on Form S-3, which is
incorporated by reference as Exhibit C-1 hereto.
o Ameren Long-term Incentive Plan. In 1998, Ameren adopted a long-term
-------------------------------
incentive plan ("1998 Incentive Plan") for eligible employees,
replacing the plan previously in place at AmerenUE. The 1998 Incentive
Plan provides for the grant of options, performance awards, restricted
stock, dividend equivalents and stock appreciation rights. Under the
terms of the plan, options may be granted at a price not less than the
fair market value of Ameren's Common Stock at the date of the grant.
Granted options vest over a period of five years, beginning at the
date of the grant, and provide for acceleration of exercisability of
the options upon the occurrence of certain events, including
retirement. Outstanding options expire on various dates through 2010.
Ameren has registered 4,000,000 shares of Common Stock for issuance or
delivery under the 1998 Incentive Plan. See Registration Statement on
Form S-8, which is incorporated by reference as Exhibit C-2 hereto.
The 1998 Incentive Plan is incorporated by reference as Exhibit H
hereto.
o Ameren Corporation Savings Investment Plan (formerly the Union
------------------------------------------
Electric Savings Investment Plan). Ameren maintains an employee
savings investment plan ("SIP") which permits eligible participants
under Section 401(k) of the Internal Revenue Code to defer current
federal income taxes on contributions to the SIP and earnings thereon.
The plan is open to both management and union (contract) employees.
All eligible employees who are at least 21 years old and have
completed 1 year of service can participate. Participants may
contribute via payroll deductions up to 15% of their base pay and can
invest in one or more investment funds, including the Ameren Common
Stock Fund. Ameren, to the extent sufficient earnings are available,
may partially match contributions made to the SIP by participants. The
match, if any, and the allocation of matching contributions for
contract employees are established by the collective bargaining
agreement of the participant's bargaining unit. Ameren has registered
2,600,000 shares of Common Stock for issuance or delivery under the
SIP. See Registration Statement on Form S-8, which is incorporated by
reference as Exhibit C-3 hereto.
o Ameren Corporation Employee Long-term Savings Plan. Ameren sponsors
--------------------------------------------------
two investment savings plans that permit employees of AmerenCIPS and
Genco who are members of certain collective bargaining units to defer
federal income taxes on contributions to the plans and earnings
thereon. The plans are qualified plans under Section 401(k) of the
Internal Revenue Code. Participants can participate in only one plan.
Employees who have one year of service and have attained the age of 21
8
can participate in one of the available plans. A participant can
contribute up to 15% of his or her compensation into a plan and invest
in one or more investment funds, including the Ameren Common Stock
Fund. Ameren, to the extent sufficient earnings are available, may
partially match contributions made to these plans by participants. The
match, if any, and the allocation of matching contributions are
established by the collective bargaining agreement of the
participant's bargaining unit. Ameren has registered 400,000 shares of
Common Stock for issuance or delivery under each of these plans. See
Post-Effective Amendment No. 2 to Ameren's Registration Statement on
Form S-8, which is incorporated by reference as Exhibit C-4 hereto.
Ameren proposes to issue shares of its Common Stock under the authorization
and within the limitations set forth herein in order to satisfy its obligations
under each of these existing Plans. Shares of Common Stock issued under these
Plans may either be newly issued shares, treasury shares or shares purchased in
the open market. Ameren will make open-market purchases of Common Stock in
accordance with the terms of or in connection with the operation of the Plans
pursuant to Rule 42. Ameren also proposes, within the limitations set forth
herein, to issue and/or purchase shares of Common Stock pursuant to these
existing Plans, as they may be amended or extended, and pursuant to any similar
plans or plan funding arrangements hereafter adopted without any additional
Commission order.
1.5.2 Preferred Stock, Long-term Debt and other Preferred or
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Equity-Linked Securities. Ameren proposes to issue Preferred Stock or, directly
------------------------
or indirectly through one or more Financing Subsidiaries, to issue Long-term
Debt and other types of preferred securities (including, specifically, trust
preferred securities) or equity-linked securities (including, specifically, debt
or preferred securities that are convertible, either mandatorily or at the
option of the holder, into Common Stock and forward purchase contracts for
Common Stock).11 The proceeds of Preferred Stock, Long-term Debt or other
preferred or equity-linked securities would provide an important source of
future financing primarily for use in the operations of and to fund investments
in Ameren's authorized and exempt Non-utility Subsidiaries under the Act.12
------------------------
11 There are many different variations of equity-linked products offered in
the marketplace. Typically, these products combine a security with a fixed
obligation (e.g., preferred stock or debt) with a conversion feature that is
----
exercisable (often mandatorily) within a relatively short period (e.g., three to
----
six years after issuance). These instruments may also be tax advantaged. From
the issuer's standpoint, an equity-linked security may offer a means to raise
capital at a lower overall economic or after-tax cost than other types of
long-term securities, in that the fixed obligation component may have a lower
after-tax cost than straight preferred stock and all or a portion of the
interest or dividends paid may be tax deductible. From an economic standpoint,
these types of securities also generally carry a lower cost than common equity.
12 The Commission has approved a similar financing application filed by The
Southern Company ("Southern") in which Southern requested approval to issue
preferred securities and long-term debt, directly or indirectly through
special-purpose financing entities. See The Southern Company, Holding Co. Act
Release No. 27134 (Feb. 9, 2000). In that case, the Commission took account of
the changing needs of registered holding companies for sources of capital other
than common equity and short-term debt brought about primarily by the
elimination of restrictions under the Act on investments in various types of
non-core businesses (e.g., EWGs, FUCOs, ETCs and businesses allowed by Rule 58).
----
The Commission noted that, without the ability to raise capital in external
markets that is appropriate for such investments, registered holding companies
would be at a competitive disadvantage to other energy companies that are not
subject to regulation under the Act.
9
Preferred Stock or other types of preferred or equity-linked securities may
be issued in one or more series with such rights, preferences, and priorities as
may be designated in the instrument creating each such series. All such
securities will be redeemed no later than 50 years after the issuance thereof,
unless converted into Common Stock. The dividend rate on any series of Preferred
Stock or other preferred or equity-linked securities will not exceed at the time
of issuance 700 basis points over the yield to maturity of a U.S. Treasury
security having a remaining term equal to the term of such securities, or, if no
such Treasury security is outstanding, then the yield to maturity of a 30-year
U.S. Treasury Bond. Dividends or distributions on Preferred Stock or other
preferred or equity-linked securities will be made periodically and to the
extent funds are legally available for such purpose, but may be made subject to
terms that allow the issuer to defer dividend payments or distributions for
specified periods. Preferred or equity-linked securities may be convertible or
exchangeable into shares of Common Stock and may be issued in the form of shares
or units.
Long-term Debt of a particular series (a) will have a maturity ranging from
one to 50 years, (b) will bear interest at a rate not to exceed at the time of
issuance 500 basis points over the yield to maturity of a U.S. Treasury security
having a remaining term equal to the average life of such Long-term Debt, or, if
no such Treasury security is outstanding, then the yield to maturity of a
30-year U.S. Treasury Bond, (c) may be subject to optional and/or mandatory
redemption, in whole or in part, at par or at various premiums above the
principal amount thereof, (d) may be entitled to mandatory or optional sinking
fund provisions, (e) may provide for reset of the coupon pursuant to a
remarketing or auction arrangement, and (f) may be called from existing
investors by a third party. The maturity dates, interest rates, and redemption
and sinking fund provisions, if any, with respect to the Long-term Debt of a
particular series, as well as any associated placement, underwriting or selling
agent fees, commissions and discounts, if any, will be established by
negotiation or competitive bidding.
Except in accordance with a further order of the Commission in this
proceeding, Ameren will not issue any Long-term Debt or Preferred Stock or other
type of preferred or equity-linked securities unless such securities are rated
at the investment grade level as established by at least one nationally
recognized statistical rating organization, as that term is used in paragraphs
(c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the Securities Exchange Act of
1934. It is requested that the Commission reserve jurisdiction over the issuance
by Ameren of any such securities that are rated below investment grade.
1.5.3 Short-term Debt. Ameren proposes to issue and sell from time to
---------------
time Short-term Debt in an aggregate principal amount at any time outstanding
not to exceed $1.5 billion. Short-term Debt may include commercial paper notes,
10
bank notes, and other forms of short-term indebtedness. All Short-term Debt will
have maturities of less than one year from the date of issuance.
Commercial paper will be sold in established domestic or European
commercial paper markets. Such commercial paper would typically be sold to
dealers at the discount rate per annum prevailing at the date of issuance for
commercial paper of comparable quality and maturities sold to commercial paper
dealers generally. It is expected that the dealers acquiring such commercial
paper will reoffer it at a discount to corporate, institutional and, with
respect to European commercial paper, individual investors. It is anticipated
that such commercial paper will be reoffered to investors such as commercial
banks, insurance companies, pension funds, investment trusts, foundations,
colleges and universities, finance companies and nonfinancial corporations.
Ameren also proposes to establish and maintain back-up credit lines with
banks or other institutional lenders to support its commercial paper program(s)
and other credit arrangements and/or borrowing facilities generally available to
borrowers with comparable credit ratings as it may deem appropriate in light of
its needs and existing market conditions providing for revolving credit or other
loans and having commitment periods not longer than the Authorization Period.
Only the amounts drawn and outstanding under these agreements and facilities
will be counted against the proposed limit on Short-term Debt.
The effective cost of money on all Short-term Debt will not exceed at the
time of issuance 300 basis points over the London Interbank Offered Rate
("LIBOR").
1.6 Guarantees. Ameren requests authorization to provide Guarantees with
----------
respect to the debt or contractual obligations of any Non-utility Subsidiary as
may be appropriate in the ordinary course of such subsidiary's business, in an
aggregate principal amount not to exceed $1.5 billion outstanding at any one
time, provided however, that the amount of any Guarantees in respect of
obligations of any Non-utility Subsidiaries shall also be subject to the
limitations of Rule 53(a)(1) or Rule 58(a)(1), as applicable. In addition to
parent guarantees, Guarantees may also be provided in the form of formal credit
enhancement agreements, including but not limited to "keep well" agreements and
reimbursement undertakings under letters of credit. The proposed limitation on
Guarantees shall not include the amount of any guarantees or other forms of
credit support provided with respect to securities issued by any Financing
Subsidiary (the amounts of which would count only against the proposed
limitations on the amounts of debt and equity securities that Ameren may issue).
Ameren may charge any Non-utility Subsidiary a fee for each Guarantee provided
on its behalf that is not greater than the cost, if any, of obtaining the
liquidity necessary to perform the guarantee (for example, bank line commitment
fees or letter of credit fees, plus other transactional expenses) for the period
of time the Guarantee remains outstanding.
1.7 Financing Subsidiaries. Subsequent to the date of the Restructuring
----------------------
Order, which, as indicated, authorizes Ameren to organize and acquire the equity
securities of one or more Financing Subsidiaries, the Commission issued an order
in an unrelated proceeding approving the transfer of proceeds of financing by a
financing entity to a registered holding company by dividend, loan or other
distribution. See The Southern Company, supra n.11. In that case, the Commission
11
held that the upstream transfer of funds to Southern by an entity formed
exclusively for the purpose of serving as the vehicle by which Southern may seek
to raise capital would not violate the prohibition in Section 12(a) of the Act
on loans or extensions of credit to a registered holding company, even if the
transfer is booked as a loan. For the reasons articulated by the Commission in
The Southern Company, it is appropriate that the Commission release jurisdiction
heretofore reserved under the Restructuring Order over the transfer of financing
proceeds by a Financing Subsidiary to Ameren.
1.8 Hedging Transactions.
--------------------
1.8.1 Interest Rate Hedges. Ameren, directly or indirectly through
--------------------
any Financing Subsidiary, requests authorization to enter into interest rate
hedging transactions with respect to outstanding indebtedness ("Interest Rate
Hedges"), subject to certain limitations and restrictions, in order to reduce or
manage the effective interest rate cost. Interest Rate Hedges would only be
entered into with counterparties ("Approved Counterparties") whose senior debt
ratings, or the senior debt ratings of the parent companies of the
counterparties, as published by Standard and Poor's Ratings Group, are equal to
or greater than BBB, or an equivalent rating from Moody's Investors Service or
Fitch, Inc.
Interest Rate Hedges will involve the use of financial instruments commonly
used in today's capital markets, such as interest rate swaps, caps, collars,
floors, and structured notes (i.e., a debt instrument in which the principal
and/or interest payments are indirectly linked to the value of an underlying
asset or index), or transactions involving the purchase or sale, including short
sales, of U.S. Treasury Securities. The transactions would be for fixed periods
and stated notional amounts. Fees, commissions and other amounts payable to the
counterparty or exchange (excluding, however, the swap or option payments) in
connection with an Interest Rate Hedge will not exceed those generally
obtainable in competitive markets for parties of comparable credit quality.
1.8.2 Anticipatory Hedges. In addition, Ameren, directly or
-------------------
indirectly through any Financing Subsidiary, requests authorization to enter
into interest rate hedging transactions with respect to anticipated debt
offerings (the "Anticipatory Hedges"), subject to certain limitations and
restrictions. Such Anticipatory Hedges would only be entered into with Approved
Counterparties, and would be utilized to fix the interest rate and/or limit the
interest rate risk associated with any new issuance through (i) a forward sale
of exchange-traded U.S. Treasury futures contracts, U.S. Treasury Securities
and/or a forward swap (each a "Forward Sale"), (ii) the purchase of put options
on U.S. Treasury Securities (a "Put Options Purchase"), (iii) a Put Options
Purchase in combination with the sale of call options on U.S. Treasury
Securities (a "Zero Cost Collar"), (iv) transactions involving the purchase or
sale, including short sales, of U.S. Treasury Securities, or (v) some
combination of a Forward Sale, Put Options Purchase, Zero Cost Collar and/or
other derivative or cash transactions, including, but not limited to structured
notes, caps and collars, appropriate for the Anticipatory Hedges.
Anticipatory Hedges may be executed on-exchange ("On-Exchange Trades") with
brokers through the opening of futures and/or options positions traded on the
Chicago Board of Trade, Chicago Mercantile Exchange or other financial exchange,
the opening of over-the-counter positions with one or more counterparties
12
("Off-Exchange Trades"), or a combination of On-Exchange Trades and Off-Exchange
Trades. Ameren will determine the optimal structure of each Anticipatory Hedge
transaction at the time of execution.
Each Interest Rate Hedge and Anticipatory Hedge will qualify for hedge
accounting treatment at the time it is entered into under Generally Accepted
Accounting Principles. Ameren will also comply with the then existing financial
disclosure requirements of the Financial Accounting Standards Board associated
with hedging transactions.13 Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which became effective on January 1, 2001, establishes accounting
and reporting standards for derivative financial instruments and hedging
activities. If, subsequent to its inception, a hedge transaction ceases to
qualify for hedge accounting treatment under SFAS No. 133, the effect of such
change primarily relates to the accounting treatment and financial statement
presentation of such instrument rather than to any an increase in out-of-pocket
expense to the company.
1.9 Certificates of Notification. Ameren proposes to file certificates of
----------------------------
notification pursuant to Rule 24 that report each of the transactions carried
out in accordance with the terms and conditions of and for the purposes
represented in this Application/Declaration. Such certificates of notification
would be filed within 60 days after the end of each of the first three calendar
quarters, and 90 days after the end of the last calendar quarter, in which
transactions occur. The Rule 24 certificates will contain the following
information for the reporting period:
(a) The sales of any Common Stock and the purchase price per share
and the market price per share at the date of the agreement of sale;
(b) The total number of shares of Common Stock issued or issuable
under options, warrants or other stock-purchase rights granted during the
quarter under the Plans;
(c) If Common Stock has been transferred to a seller of securities of
a company being acquired, the number of shares so issued, the value per
share and whether the shares are restricted to the acquiror;
(d) The amount and terms of any Long-term Debt, Preferred Stock or
other preferred or equity-linked securities issued directly or indirectly
by Ameren during the calendar quarter;
(e) The amount and terms of any Short-term Debt issued directly or
indirectly by Ameren during the calendar quarter;
------------------------
13 The Commission has previously authorized substantially similar
proposals. See New Century Energies, Inc., et al., Holding Co. Act Release No.
--- ----------------------------------
27000 (Apr. 7, 1999); and NiSource Inc., Holding Co. Act Release No. 27265 (Nov.
-------------
1, 2000).
13
(f) A description of the amount, terms and purpose of any Guarantee
issued during the calendar quarter by Ameren and the name of the
beneficiary of such Guarantee;
(g) The name and amount invested by Ameren in any Financing
Subsidiary during the calendar quarter;
(h) The notional amount and principal terms of any Interest Rate
Hedge or Anticipatory Hedge entered into during the quarter and the
identity of the parties to such instruments; and
(i) Consolidated balance sheet of Ameren as of the end of the
calendar quarter.14
ITEM 2. FEES, COMMISSIONS AND EXPENSES.
------------------------------
The fees, commissions and expenses incurred or to be incurred in connection
with the preparation and filing of this Application/Declaration are estimated
not to exceed $15,000. The above fees do not include underwriting fees,
registration fees under the Securities Act of 1933, dealer discounts, commitment
fees, compensating balances, fees for obtaining letters of credit, rating agency
fees, and other similar fees and expenses customarily incurred in connection
with the issuance of securities or obtaining third-party credit support. Such
fees, commissions and expenses will not exceed 6% of the amount of any specific
financing transaction covered by this Application/Declaration.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
-------------------------------
3.1 General. Sections 6(a) and 7 of the Act are applicable to the issuance
-------
and sale of Common Stock, Preferred Stock, other preferred or equity-linked
securities, Long-term Debt and Short-term Debt by Ameren. In addition, Sections
6(a), 7 and 12(b) of the Act and Rule 45(a) are applicable to the issuance of
Guarantees by Ameren.
3.2 Compliance with Rules 53 and 54. The transactions proposed herein are
-------------------------------
also subject to Rules 53 and 54. Under Rule 53(a), the Commission shall not make
certain specified findings under Sections 7 and 12 in connection with a proposal
by a holding company to issue securities for the purpose of acquiring the
securities of or other interest in an EWG, or to guarantee the securities of an
EWG, if each of the conditions in paragraphs (a)(1) through (a)(4) thereof are
met, provided that none of the conditions specified in paragraphs (b)(1) through
(b)(3) of Rule 53 exists. Rule 54 provides that the Commission shall not
consider the effect of the capitalization or earnings of subsidiaries of a
registered holding company that are EWGs or FUCOs in determining whether to
------------------------
14 Any of the information described in items (a) through (i) that is
provided in filings under the Securities Act of 1933 or Securities Exchange Act
of 1934 may be incorporated into the Rule 24 certificate by reference.
14
approve other transactions if Rule 53(a), (b) and (c) are satisfied. These
standards are met.
Rule 53(a)(1): Ameren's "aggregate investment" in EWGs and FUCOs is
approximately $262,500,000, or approximately 16.5% of Ameren's average
"consolidated retained earnings" for the four quarters ended March 31, 2001.15
Rule 53(a)(2): Ameren will maintain books and records enabling it to
identify investments in and earnings from each EWG and FUCO in which it directly
or indirectly acquires and holds an interest. Ameren will cause each domestic
EWG in which it acquires and holds an interest, and each foreign EWG and FUCO
that is a majority-owned subsidiary, to maintain its books and records and
prepare its financial statements in conformity with U.S. generally accepted
accounting principles ("GAAP"). All of such books and records and financial
statements will be made available to the Commission, in English, upon request.
Rule 53(a)(3): No more than 2% of the employees of Ameren's domestic
utility subsidiaries will, at any one time, directly or indirectly, render
services to EWGs and FUCOs.
Rule 53(a)(4): Ameren will submit a copy of the Application/Declaration in
this proceeding and each amendment thereto, and will submit copies of any Rule
24 certificates required hereunder, as well as a copy of Ameren's Form U5S, to
each of the public service commissions having jurisdiction over the retail rates
of Ameren's domestic utility subsidiaries.
In addition, Ameren states that the provisions of Rule 53(a) are not made
inapplicable to the authorization herein requested by reason of the occurrence
or continuance of any of the circumstances specified in Rule 53(b). Rule 53(c)
is inapplicable by its terms.
ITEM 4. REGULATORY APPROVAL.
-------------------
No state commission, and no federal commission, other than the Commission,
has jurisdiction over any of the transactions proposed in this
Application/Declaration.
ITEM 5. PROCEDURE.
---------
The Commission is requested to publish a notice under Rule 23 with respect
to the filing of this Application/Declaration as soon as practicable. Ameren
requests that the Commission's order be issued as soon as the rules allow, and
that there should not be a 30-day waiting period between issuance of the
Commission's order and the date on which the order is to become effective.
Ameren hereby waives a recommended decision by a hearing officer or any other
responsible officer of the Commission and consent that the Division of
Investment Management may assist in the preparation of the Commission's decision
and/or order, unless such Division opposes the matters proposed herein.
------------------------
15 Ameren does not currently hold an interest in any FUCO.
15
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
---------------------------------
A. EXHIBITS.
--------
A-1 Restated Articles of Incorporation of Ameren (incorporated
by reference to Annex F to the Registration Statement on
Form S-4 of Ameren in File No. 33-64165).
A-2 Certificate of Amendment to the Restated Articles of
Incorporation of Ameren as filed with the Secretary of State
of the State of Missouri on December 14, 1998 (incorporated
by reference to Exhibit 3(i) to Ameren's Annual Report on
Form 10-K for the year ended December 31, 1998 in File No.
1-14756).
A-3 By-Laws of Ameren, as amended to December 31, 1997
(incorporated by reference to Exhibit 3(ii) to Ameren's
Annual Report on Form 10-K for the year ended December 31,
1997 in File No. 1-14756).
B None.
C-1 Post-Effective Amendment No. 1 to Registration Statement of
Ameren on Form S-3, including Prospectus for Dividend
Reinvestment and Stock Purchase Plan, as filed June 15,
2000, in File No. 33-43721. (Incorporated herein by
reference).
C-2 Registration Statement of Ameren on Form S-8, as filed April
23, 1998, in File No. 333-50793. (Incorporated herein by
reference).
C-3 Registration Statement of Ameren on Form S-8, as filed
January 5, 1998, in File No. 333-43737. (Incorporated herein
by reference).
C-4 Post-Effective Amendment No. 2 to Registration Statement of
Ameren on Form S-8, as filed December 16, 1999, in File No.
333-43743. (Incorporated herein by reference).
D Not applicable.
E Organizational chart. (Form SE). (Previously filed).
F Opinion of Counsel. (To be filed by amendment).
G Proposed Form of Federal Register Notice. (Previously
filed).
H Ameren Corporation Long-term Incentive Plan of 1998.
(Incorporated by reference to Exhibit 10.1 to Ameren's
Annual Report on Form 10-K for the year ended December 31,
1998, in File No. 001-14756).
16
B. FINANCIAL STATEMENTS.
--------------------
FS-1 Ameren Consolidated Statements See Annual Report of Ameren on
of Income for the year ended Form 10-K for the year ended
December 31, 2000 December 31, 2000 in File No.
1-14756
FS-2 Ameren Consolidated Balance See Annual Report of Ameren on
Sheets as of December 31, 2000 Form 10-K for the year ended
December 31, 2000 in File No.
1-14756
FS-3 Ameren Consolidated Statements See Quarterly Report of Ameren
of Income for the three months on Form 10-Q for the quarter
ended March 31, 2001 ended March 31, 2001 in File
No. 1-14756
FS-4 Ameren Consolidated Balance See Quarterly Report of Ameren
Sheets as of March 31, 2001 on Form 10-Q for the quarter
ended March 31,2001 in File
No. 1-14756
FS-5 Forecast of consolidated To be filed by amendment (To
capitalization ratios as of be filed confidentially
December 31, 2001 through pursuant to Rule 104)
December 31, 2004
FS-6 Sources and uses of funds To be filed by amendment (To
analysis for each year be filed confidentially
2001 - 2004 pursuant to Rule 104)
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
---------------------------------------
None of the matters that are the subject of this Application/Declaration
involves a "major federal action" nor do such matters "significantly affect the
quality of the human environment" as those terms are used in section 102(2)(C)
of the National Environmental Policy Act. The transactions that are the subject
of this Application/Declaration will not result in changes in the operation of
the Applicants that will have an impact on the environment. The Applicants are
not aware of any federal agency that has prepared or is preparing an
environmental impact statement with respect to the transactions that are the
subject of this Application/Declaration.
17
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this amended
Application/Declaration to be signed on its behalf by the undersigned thereunto
duly authorized.
AMEREN CORPORATION
By: /s/ Steven R. Sullivan
------------------
Name: Steven R. Sullivan
Title: Vice President, General Counsel
and Secretary
Date: June 26, 2001
18